An excellent article on the RSI appears in the current issue of SFO (1/09) titled "Dusting off an Old Indicator (page 71). If you haven't read it you may wish to as it will give you some new perspectives on using it as a trading vehicle. Below is the formula from the article and below it the AB version. Not being a programmer can someone advise if there is any appreciable difference in the formulas?
Dick H The Relative Strength Formula from SFO RSI = 100 (100/1 + RS) RS = Average of N-period Up closes/Average of N-period Down closes Note: The average Up-Dn closes is always found by using "N" as the divisor a common error is to use the actual Up DN closes. (according to the author) =================================================== AB formula (Tomasz) RSI=100-[100/(1+U/D)] U = average of upward price closes (EMA of gains) D = average of downward price closes (EMA of losses)
